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National meeting of SAFERS in La Rochelle:
“Warning, French land grabbing is increasing!” says E. Hyest

Arnaud Carpon, Terre-net Média

Article published in Terre-net Média

Representatives from the SAFERs (the French Land Use and Rural Development companies) met in La Rochelle on Thursday, December 3, 2015 to discuss the link between the needed land regulation and the essential farming competitiveness. They are mostly concerned by the growing trend of French farmland grabbing from investment funds. Emmanuel Hyest, the President of the French Federation of SAFERs sends out an alarm signal in the following interview.

Terre-net - The law for the future of agriculture was enacted just over a year ago. You had then indicated your satisfaction to see some advances in the issue of land management. What is the current situation regarding the implementation of the measures that were passed?

Emmanuel Hyest –The provisions adopted in the legislation on the future of agriculture still have not been fully put in force. We are starting to intervene concerning plots including both built and un-built land. In addition, the Macron Law can now be applied regarding interventions on land bequests. Good progresses are also achieved regarding SAFERs’ governance issues. We are expecting some decrees, especially regarding transfers of company shares that need further clarification.

Terre-net –This past spring, you sanctioned an agreement for the future of SAFERs with the Minister of Agriculture. What is happening?

Emmanuel Hyest - First of all, I see as extremely positive the fact that the Minister of Agriculture and the Government regain ownership of the land instruments embodied by SAFERs. This represents an additional recognition of a crucial role in the vision and regulation of French agriculture. The agreement lays down in specific terms the role of the state in SAFER’s interventions. This strong endorsement by the Ministry is most welcomed.

Terre-net – During the conference, you addressed the issue of farm transferability. Farmers are investing to preserve and develop their operations. Yet, these are increasingly less transferable. Could you share your thoughts on this trend?

Emmanuel Hyest – The issue of farm transferability is a real challenge for French agriculture. Today’s main concern is that we are moving towards a model of financialized agriculture, as seen in other sectors such as large vineyards or manufacturing facilities. There comes a point when we are no longer talking about agriculture but about finance.

Terre-net – What are the medium- and long-term risks?

Emmanuel Hyest – We might be concerned to see, sooner or later, what has been occurring in viticulture during the past decades. A farm does not happen overnight. It is the achievement of an entire career and consecutive investments. No young person is able to take up certain farms that have become too expensive.

Sometimes, even the progressive take over of a farm is not feasible because of extremely high prices.

The SAFERs are trying to take action to fight this financialization of agriculture. But these interventions do not challenge the creation of agricultural companies that allowed young persons to progressively take up farms. Yet, I observe that in many instances, the progressive take over is not feasible because of extremely high prices.

Terre-net – Is not it a fact that the legislation has bolstered the SAFERs’ pre-emption rights, precisely to prevent such “financialization” through the creation of corporations?

Emmanuel Hyest – Yes, but unfortunately the law has opened a loophole in land control. It allows SAFERs to solely intervene in operations involving the transfer of 100 percent of the shares of a company. I can already tell you that transactions involving transfers of 99 percent of corporate shares are already occurring in order to get around the provisions of the legislation.

For the past four years, an increasing number of hectares are moving in the hands of companies, and among them we certainly have financial funds, especially foreign funds. This represents a genuine movement of farmland grabbing by a very small number of operators. The problem is that we know nothing of their identity. This is a total distortion of the principle of transparency. Land management must remain transparent; yet it is becoming opaque.

Our family farming model is not defined by the size of the farm.

Terre-net – Is this trend linked to the development of large farms, which is often criticized by the supporters of family farming?

Emmanuel Hyest – Our family farming model is not defined by the size of a farm. It is defined by the ability of active farmers to make decisions and to control equity. Within this model and this definition, there are small farms as well as large operations, very specialized or very diversified farming structures. It all comes down to transparency.

Terre-net – In your meeting, you also covered what is done abroad in matters of land management. Are there any ideas beyond our borders that could be adopted to better manage farmland?

Emmanuel Hyest – Believe it or not, Germany––a country known to be very liberal––was the first European nation to implement the regulation of preemption rights, and this was in 1919! Thus, even in a so-called liberal nation, it was always thought that controlling land was a requirement because agricultural and land ownership is a crucial issue since it involves food sovereignty.

In Canada and in the United States, mechanisms that are more restrictive than our own measures are being implemented. We must examine these mechanisms, since they might motivate us to further improve our land policies.

Terre-net - What are the SAFERs’ areas of work for the coming months?

Emmanuel Hyest – Our priority is preparing a report on the trend of financialization and land transfers in the case of fractional transmissions of company shares, because these have been more frequent in the past few months. The report will be written during the first half of 2016 and then forwarded to the Minister of Agriculture.

For the short term, we will continue our work on assisting young farmers. For instance, we are looking into the implementation of a guarantee system with local authorities. We are also emphasizing our assistance through capital investors.

As far as the draft of the amending finance law is concerned, we are supporting a provision that would grant a tax exemption on real estate incomes for persons investing in land to assist young farmers. These investors could therefore benefit from a tax advantage in comparison to mere speculators.